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Louisa Gouliamaki / AFP - Getty Images
Greek leftists demonstrate on Mar. 22, 2013 in Athens in support of Cypriots with a banner, reading: "common struggle of the people of Greece and Cyprus against the governments, memorandum, euro and EU
Lawmakers in Cyprus approved three bills late Friday aimed at securing a bailout for its troubled banks from the European Union and averting a financial meltdown.
The legislation includes one bill that allows the government to divide the wobbling lenders into good and bad banks -- a law that would likely to be applied first to Cyprus Popular Bank. The goal is to restructure without hurting small depositors.
A second law puts in place restrictions on financial transactions in times of crisis and a third sets up a "solidarity fund."
The country is expected to adopt more legislation in an effort to raise the 5.8 billion euros Cyprus needs to get an EU bailout.
Thanassis Stavrakis / AP
A man uses an ATM of Piraeus Bank in central Athens, Friday, March 22, 2013. Greece's Piraeus Bank said it has been chosen to buy two Cypriot banks' operations in Greece.
Among the other bills being brought forward is one that imposes a tax of less than 1 percent on all bank deposits, Averof Neophytou, deputy head of the governing DISY party told The Associated Press.
Earlier Friday a Greek Bank was chosen to take over the local branches of Cyprus's troubled banks in a bid to shelter Greek customers of those institutions and help Cyprus shrink its bloated banking sector.
Piraeus Bank of Greece was to take over the operations in a deal that a source close to the matter said involved the transfer of 17 billion euros of loans and 14 billion euros of deposits, Reuters reported.
The terms of the deal were not expected to emerge until Sunday, and would need to be approved by European competition authorities, according to Greece's bank bailout fund.
Worried the crisis could trigger panic among Greek depositors, Greek officials had been working to agree on a deal since early this week. They were forced to put the plans on hold after Cyprus voted down a proposed bank levy included in its bailout agreement.
"We have responded to the necessity of utterly safeguarding the depositors of the Cypriot banks in Greece," Piraeus Chairman Michalis Sallas said.
There was no immediate announcement about the fate of the Greek operations of Cyprus's third-biggest bank, Hellenic Bank, which are much smaller than those of the top two.
"It's unclear if the deal will include Hellenic Bank. Either way, it won't move the needle much," a Greek bank bailout fund official told Reuters.
Cypriot banks hold 8 percent of Greek banking deposits and 10 percent of loans. They have about 300 branches in Greece.
Reuters and The Associated Press contributed to this report.
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The real key to all of this is in the last paragraph:
The IMF, ECB and Germany don't want to have any bank which has too many assets. They'd, apparently, prefer to have banks which have very few assets.
This is a crisis created by the Germans. The banks in Cyprus were operating well until the ECB stepped in and said that the banks were too big, relative to the small size of the rest of the Cyprus economy.
Of course, we don't see the ECB telling CHASE, RBS or any of the other monster size banks that THEY are too big.
I still say Cyprus should tell the ECB that it will not accept their terms and they will have to fight to force it out of the EU.
The Progressives are still PUSHING for a TAX on ALL BANK DEPOSITS. The less than 1% is to make the individuals holding bank accounts fee much better.
Standby for riots in the streets.....just like Athens.
Wait a minute.....Financially strapped Greece is bailing out financially strapped Cyprus ? Such Progressive irony.
Yep, the EuroPIIgs are burning at both ends.
Is the White House listening.....Mr. Canary ?
It's not "Europe" that is doing this to Cyprus, it's the Troika: EU commission, ECB (European Central Bank) and the IMF. And don't be lulled into thinking it can't happen here by articles like this in the corporate media:
http://www.dropshots.com/OldCrow2#date/2012-02-12/15:15:50
Excerpt from article on the Counter Punch website:
It CAN Happen Here
Cyprus is a small island, of little apparent significance. But one day, the bold move of its legislators may be compared to the Battle of Marathon, the pivotal moment in European history when their Greek forebears fended off the Persians, allowing classical Greek civilization to flourish. The current battle on this tiny island has taken on global significance. If the technocrat bankers can push through their confiscation scheme there, precedent will be established for doing it elsewhere when bank bailouts become prohibitive for governments.
That situation could be looming even now in the United States. As Gretchen Morgenson warned in a recent article on the 307-page Senate report detailing last year’s $6.2 billion trading fiasco at JPMorganChase: “Be afraid.” The report resoundingly disproves the premise that the Dodd-Frank legislation has made our system safe from the reckless banking activities that brought the economy to its knees in 2008. Writes Morgenson:
Pam Martens observed in a March 18th article that JPMorgan was gambling in the stock market with depositor funds. She writes, “trading stocks with customers’ savings deposits – that truly has the ring of the excesses of 1929 . . . .”
The large institutional banks not only could fail; they are likely to fail. When the derivative scheme collapses and the US government refuses a bailout, JPMorgan could be giving its depositors’ accounts sizeable “haircuts” along guidelines established by the BIS and Reserve Bank of New Zealand...
http://www.counterpunch.org/2013/03/22/the-battle-of-cyprus/
The problem is that Cyprus entire economy was banking LOL. It wasn't caused by the ECB. ECB already has control over the banking sector. This is another country living in a world of deficit is good without any means of production.
Cyprus, Greece, Spain, all evidence of the failed Euro experiment. The one-worlders, socialist ideas have one again failed.
Actually, you haven't a clue of WTF you are talking about. Spain is doing better and actually earning a surplus on its exports, while Greece's biggest problem is its government's refusal to go after wealthy tax evaders.
Greek banks coming to the rescue? Now that shoudl be a headline.
When the banks reopen, do you think there will be a run on the banks? Do you think depositors will try to get their money out of the banks? Do you think the banks will be more or less healthy following such stupid governance as proposing to confiscate deposits?
Thank goodness we live in America where our deposits (trillions of dollars) are backed up by the promise of the FDIC (currently funded with 25 billion dollars). Nothing could possibly go wrong here in America, could it?
Sure is a good thing the government is not giving us an empty promise on FDIC like it did on Social Security, Medicare, etc. Just keep on beleiving that here in America, our banks are much more safe. Keep drinking the KoolAide.
Congress spends more than it has to spend, so we issue debt from the Treasury to finance the deficit spending, the Treasury debt so issued is bought by the Federal Reserve, and then the Federal Reserve issues debt to us in the form of currency (federal reserve notes you know) which is how the deficit spending is financed with debt and the debt is syndicated to the citizens. By this design, we the people have lost 26% of our deposits in the form of lost buying power in just the last 10 years.
At least the Cypriots are smart enough to complain and protest when the government tries to get 15% of their deposits. Here? We say nothing when the government confiscates 26%. How does it feel to be dumber than a Cypriot?
All information I've read lays the problem at the feet of bad Greek debt. Sooo, they decide to fold the banks into Greek Banks? Boy THAT makes a lot of sense!
As for Germany being responsible, how can you fault them for covering their own rear ends? Germany has been key and substantially propped up the whole Euro fisco thus far.
GREEK WEALTH IS EVERYWHERE BUT TAX FORMS
ATHENS — In the wealthy, northern suburbs of this city, where summer temperatures often hit the high 90s, just 324 residents checked the box on their tax returns admitting that they owned pools.
So tax investigators studied satellite photos of the area — a sprawling collection of expensive villas tucked behind tall gates — and came back with a decidedly different number: 16,974 pools.
That kind of wholesale lying about assets, and other eye-popping cases that are surfacing in the news media here, points to the staggering breadth of tax dodging that has long been a way of life here.
Such evasion has played a significant role in Greece’s debt crisis, and as the country struggles to get its financial house in order, it is going after tax cheats as never before.
Various studies, including one by the Federation of Greek Industries last year, have estimated that the government may be losing as much as $30 billion a year to tax evasion — a figure that would have gone a long way to solving its debt problems.
http://www.nytimes.com/2010/05/02/world/europe/02evasion.html?pagewanted=all&_r=0
Does anyone else see the irony of the bankrupt Greek banking sector "helping" the almost-bankrupt Cypriot bank sector?
Gotta be Goldie Sachs involvement.
See above about the "irony".
PTI,
How in the heck does Greece become a saviour when they themselves were in dire money troubles.
two drunks trying to hold each other up!
Just like the Fed and Obama. Who said the world didn't watch the USA administration?
Butt.
The FED(America's arm of the Global Banking Cabal) is using a different method to fleece the public out of it's money. Every month they create 40 billion dollars out of thin air and give it to themselves(the member banks that make up the FED) and by doing so strangle the free market(they are not LENDING this money, just sitting on it) and driving down the value of the dollar causing a defacto inflation by causing a 30% loss in the last four years thereby giving all Americans a 'stealth haircut'. The shoe will drop when they can't hide the inflation(food, fuel, energy are not counted now in the calculations) any more and upward pressure brings inflation. At that going, unable to keep up with adjustable interest rates, bankruptcies will abound, including local and state governments while the federal interest payments will eat up the budget. It is then that the banks will use their built up 'make believe money' and buy up everything like a fire sale. Pretty slick, hugh? "A central bank is more dangerous than a standing army...." T. Jefferson
Cyprus .....Greece.......It's all Greek to me.
What I want to see is the reaction in Greece and Cyprus when the banks reopen (on Tuesday or has that changed?) and ordinary people have a chance to decide if they want to keep their money in a bank or under a mattress.
Are Europeans allowed to own gold, silver or similar precious metals?
they still lose 1 percent of their money or more. ...The depositors should not have been penalized. The bank can lower interest rates not get stolen from people
yes we have precious metals, and a lot of other assets of which some were acquired 300 to 400 hundred years when we took to our sailing ships and Traded (some say robbed) in many things (including people). I keep my gold under my bed, my precious paintings are on my wall's, my grandfather advised this because his theory being that you shouldn't be standing at a bank teller when the germans invade, best get your asset's, roll em up and away to the hills to resist, he had a great sense of humour but lived through hard times too. The greek and cypriot people will always be in my thoughts because it is these ordinary people who will suffer, Bankers are just a modern version of the old european exploitative colonialists, why would a normal working person care if bankers get their fingers burnt? The U.K economy is also based mainly on banking after previous governments failed to help British Industry preferring instead to encourage cheap imports inc solid fuels, gas and labour etc, etc, some British governments actively destroyed our Industry's i.e mining purely for their own political ends. So we also only have a economy based on money counting here also. The Cypriot and Greek people will prevail and the international bankers / money movers will be seen as the villains that they are.
Hate to be a pessimist but when economy's start to fail, doesn't someone normally start a world war? I'm cutting my pictures out of the frames to roll up as we speak. I've seen food handout queues in the 21st century in europe on my T.V disgraceful. Foodbanks in the U.K and U.S so called civilised?
God bless the Greek and Cypriot people
I sure hope we can get in on the deal ! Do you think the Chinese will lend us the money to buy in on it ?
LOL!!!
Who woulda thunk it....
The socialists bailout the capitalists.....
Again...
This is all Greek to me; I don't understand.
This screwy deal reminds me of when Sears bought K-Mart!!!
Cyprus is a test, nothing more, nothing less. If it works, they will start doing the same in the PIIGS nations without hesitation. If it fails, they will just reduce the percentage some more. For those who doubt it, recall last week the pseudo-tax was between 6-12%. Notice that failed and now it is 1% and everyone will say "Oh, that is better than 6-12%" and the sheep will go along with it. The progressives never intended for the 6-12% to pass, they wanted the 1% all along. Once the 1% happens, they will start to increase it every year and the sheeple will accept it. For those who doubt this last, recall the VAT in Europe. It started out low and is roughly 20% on most goods. Then again, it could never happen in the US (ROFLMAO...and I am game to sell you the London Bridge!).
You want to sell the London Bridge???? I'll buy it.
Love, an obama voter.
So let me get this right? A larger bankrupt nation, Greece, is taking over the banks of another bankrupt nation...Cyprus? HAHAHAHAHAHAHA!!!!!!!!!!! THIS IS ALL A SICK JOKE RIGHT? HAHAHAHA. This is like me having the flu and coughing on an immunosuppressed AIDS patient. Hey Greece..I know you already have enough viruses and are critically ill..so here...hold this flu for me! Hold these toxic assets for me!! So now, not only do you have the threat of bank runs in Cyprus....but Greece as well. Somebody pinch me, please!!! Make this make sense! HAHAHA That's right....just keep spreading the contagion.
Ummm... the "takeover" isn't by the govt. of Greece,.. but by a Greek Bank...
Please read the article...
Ask yourself what happened when our banking system became polluted with toxic asset "debt bombs"? Who was responsible for propping up the banking system after it almost completely collapsed? That's right...the government and subsequently the taxpayer. I meant what I said........
Why don't you try reading and reasoning beyond what you read yea? ..instead of trying to be clever in thinking that you can point out someone else's errors.
Reading, reasoning and understanding are highly advanced technical skills that most right-wing loons do not possess... That's why they have to be told what to think, what to believe, who the newest and latest so-called "bad guys" are in the ever-growing and ever-changing neverending list of "bad guys" (because they can only think in the most mindlessly simplistic terms of "good guys" vs. "bad guys") and who they should hate and fear next, by their "friendly and helpful" and equally bat-feces-crazy "friends" at Fake News.
This is a no win situation. It would take only 5% of the population to withdraw its money and the whole thing falls down. Both Greece and Cyprus banks have 95% of their fluidity tied up in fractionals. How can Greece bail out Cyprus when Greece is in junk bond status? This is the catalyst that will bring down the EU. This is also the death nail for the EU and the financial structure of the world. I find it ironic that the cradle of western civilization is also the cradle for the destruction of capitalism as we know it. Thanks a lot, you greedy bastards of the banking industry (industry is a poor word for thievery). I hope all you thieving pieces of cow dung called bankers rot in the bowels of maggot infested cesspools.
totally agree.
OK, so the Greeks are propping up the Cypriot leadership. Good-
If any country tries to made an issue of this [Germany...] then they would be swatted down; Default is WAAY WAAY WORSE than a simple bailout! The economy is coming back, and big exporter Germany knows it. A shock to the system such as a Cypriot default would be HARD to overcome, and lots and lots of expensive German cars would sit on lots around the world if this was to come to pass. You can bet that the Germans are going to make this one work, just as they have the other bailouts.
Keynsian economics RULES!
Keynsian economics sucks and is immoral! Why should German taxpayers be forced to subsidize the poor decisions of other nations? How is digging a deeper hole helpful for the economy? All the bailouts and stimulus don't solve the underlying structural problems in the economy, they just delay the pain and make the problems worse!
Greece is taking on Cypriot banks? This cannot end well.
I'm sure all of the highly patriotic leftwingers in the USA will happily give up a percentage of their bank accounts to keep our own little socialist utopia going....right?
You couldn't coherently explain the difference between a "socialist", a "sociologist" and a "Scientologist" if your sad miserable pathetic life depended on it.
And people in the USA already did give up percentage sof their bank accounts, and in many cases they lost everything they had, or weren't you even born yet during the savings & loan annihilation of the 1980s, which was the NEXT TO last time that bankers gambled with depositors' money and brought about the collapse of their own lending institutions?
You remind me of a Scientologist with your distorted version of reality.
Are you on drugs and not sharing, or just "differently abled"? Or are you only 12 years old and too young and clueless to have ever heard of the savings & loan crisis that destroyed thousands of S & Ls in the 1980s?
It's a shame that the EU can't even identify their own corpse, even when it's lying right in front of them. Maybe they're waiting for the ECB to identify it for them. Who knows?
But at least the rest of us can witness what the downfall of Fractional Reserve Banking ultimately leads to, right before our own economic collapse here in the US -- much like viewing the movie trailers at a theater right before experiencing the "Full Monty" for ourselves. It'll be an entertaining ride right up until we cut our own financial throats.
(Coming soon to a theater near you).
I have glorious news, my Comrades!
After much deliberation I have heard of an offer to Cyprus that they cannot refuse: To join the People's Utopia of Zimbabwe and the Zim Dollar Zone! Under this treaty, Cyprus will immediately become a vassal of Zimbabwe. The People of Cyprus will at last be be liberated. This is what all those Cyprusian comrades have toiled for so long: the complete consummation of glorious socialism.
And what is more, they will be able to pay back their national debt in Zim Dollars.
Actually, I have much better news. And rather than being a bunch of right-wing bloviating lying B.S., this news is actually true:
Cyprus already happily accepted a $2.5 billion loan. From RUSSIA.
Cyprus nears €2.5bn Russian loan deal
Cyprus is close to agreeing to a €2.5bn ($3.4bn) emergency loan from Russia to help cover the island’s budget deficit and re-finance maturing debt, according to Kikis Kazamias, the country’s finance minister.
http://www.ft.com/intl/cms/s/0/655a3fd2-de31-11e0-9fb7-00144feabdc0.html#axzz2OM69ooZu
Seattle, did you happen to look at the date stamp of that article?
September 14, 2011 5:58 am.
Speaking of BS...
Did you happen to notice that Cyprus is negotiating with Russia to extend their line of credit?
The mega banks such as Goldman & Sachs are imploding our economy, take each country hostage and replacing it's leaders with their 'soldiers' just like a Mafia scheme i.e. Italy has a Monti Greece and so on. This is a global banking takeover. Iceland for instance which told the bank to f.o. has kept it's soverenity and is doing much better without bailouts form loan shark business. Bottom line the €uro was created to bankrupt the Eurozone.
Cyprus loan talks in Moscow constructive, says finance minister
On Tuesday the Cypriot parliament rejected a plan to impose a levy on bank deposits in order to raise €5.8bn toward a €10bn bailout offered by the European Union.
Cyprus turned to Russia for a lifeline, seeking a five-year extension on a €2.5bn loan granted in December 2011 that is due to mature in 2016. It has also asked Russia to refinance the loan and lend an additional €5bn.
"We had a very good first meeting, very constructive, very honest discussion," Sarris said after meeting Siluanov. "We've underscored how difficult the situation is." However, he said there were "no offers, nothing concrete".
Sarris said he would stay in Moscow until a deal was reached. "We'll now continue our discussion to find the solution by which we hope we will be getting some support," he said. Asked by reporters whether that meant simply renegotiating a loan, Sarris said: "No, we are looking at things beyond that."
Russian banks and businesses are believed to have more than $30bn held in banks in Cyprus, the country's favoured offshore tax haven. The proposed levy would have forced rich Russians as well as not-so-wealthy Cypriots to contribute to the EU bailout.
Putin was one of the loudest critics of the plan, calling it "unfair, unprofessional and dangerous". Russian officials expressed dismay that they were not informed of the proposal in advance.
Now, in its role as potential saviour, the Kremlin is believed to be haggling for shares in Cypriot banks and gas fields in exchange for the requested loan, the Russian press reported.
On Wednesday the Cypriot government denied reports that Cyprus Popular Bank, the country's second biggest bank, was being sold to Russian investors.
The energy minister, George Lakkotrypis, who oversees commerce, industry and tourism, was also in Moscow on Wednesday, although Cypriot officials said he was visiting a tourism exhibit.
His appearance in Moscow has fuelled speculation that the state monopoly Gazprom was seeking exploration rights over gas fields recently discovered off Cyprus's Mediterranean coast. Gazprom has denied the reports.
http://www.guardian.co.uk/world/2013/mar/20/cyprus-loan-talks-constructive-minister
To help protect bank depositors in the US, we have the FDIC. The Eurozone doesn't have anything like it, but should. It helps ward against that thing called 'run on the bank'. If they finally start one up, maybe they can call it EuroDIC (LOL).
OK Jay, I'll bite.
How do you protect trillions of dollars of deposits with 25 billion dollars of funded FDIC protection? And the answer is, you don't. You can't. You won't.
If the FDIC is called in to protect a large systemic bank failure, the FDIC will have to borrow the money (print more money) thus debase the value of the currency, thus there is no protection, only a sharing of the losses. The FDIC is just another failed credit default swap if viewed in the light of protecting the banking system deposits.
The FDIC is funded and run to protect only depositors in a particular bank that might have an issue. The FDIC cannot protect all deposits in a systemic failure and was never designed to do so. The FDIC provides only the illusion of protection as a backstop to a systemic banking failure. However, the illusion of protection is not the same thing as protection.
So once again, just like credit default swaps that were supposed to protect the banks from systemic losses on bad mortgages and derivative securities, and just like credit default swaps being null and void when the time came, so will be the FDIC if it is ever needed to protect depositors from systemic banking failures, which is why we have too big to fail banks.
But illusions and slight of hand tricks such as the FDIC do allow sheeple to sleep better because such illusion gives false hope and security. That is about the only function of the FDIC outside protecting depositors in a singular bank failure.
So when you state that the Eurozone does not have anything like the FDIC for systemic banking failure, you are correct. But then again, America does not have an FDIC to protect from systemic banking failure either. Ignorance, once again, is bliss, isn't it?
Kind of like the Lusitania coming to save the people on the Titanic.
Haaaaaa - very predictable article from the corporate whore media, loyally following orders from their daddy banking empire. The Cyprus people must bite the bullet and tell the EU cabal and their banking snakes to go to hell. If they follow the model of Icelanders when they were faced with the same genocidalists moving in for the kill, then the Cypriots will prosper and be independent. They can already kiss their existing bank deposits goodbye - so why let them do it again?
The EU syndicate must believe the people are clinically retarded. These groundbreaking 3 new laws do nothing to solve the unsolvable banking crisis.
So, lets get this straight. By stealing "less than one percent" of new deposits into Cyprus banks and by limiting how much people can withdraw from their own accounts in order to facilitate looting of their funds by the banking mafia and state, this is supposed to instill confidence into EU banking? No need to even bother commenting on the asininity of the EU criminals waving a wand and declaring certain of their banks "good".
Cyprus is just the tip of the iceberg. The USA is way beyond bankrupt and firmly under boots of the banking empire. Anyone around the world who has their money is a bank that is tied to a central bank or their has assets in their currencies, such as a Federal Reserve member bank, needs to have their head examined.
Central banks, especially the Fed must be abolished immediately, and the central banking dons arrested and tried for crimes against humanity.
Greece to take over some banks........the cat guarding the canary.
Bad move to have the Euro to begin with...............and then here in the US we passed Obamacare to screw up our economy.
Actually ObamaCare is wonderful and is already helping millions of people. But hey, ReTHUGs never let facts stand in their way.
Yeah Seattle...Obamacare sure is swell.
Here are some facts for you, Sparky:
http://finance.yahoo.com/news/obamacare-turns-3-10-disturbing-212600864.html
Jax A
Private for-profit health insurers jacked up their premiums by double digits, year after year, over and over again, all through the 1990s and 2000s... Where exactly was your "concern for health care costs" then? Ohhhhh right, it was the "pweshus and speshul pwivate sector" doing it.. so that makes everything okay to you, huh?
ObamaCare is already benefitting millions of people.
Here are some facts for you, Chippy:
3.1 million young people covered after health care law
http://usatoday30.usatoday.com/money/industries/health/story/2012-06-18/health-care-law-young-americans/55677268/1